Net profit has increased by more than 17-fold y-o-y or more than 3-fold q-o-q to RM86.1 million. This was achieved on the back of a turnover of RM435.5 million, which represents an increase of 41.0% y-o-y or 25.1% q-o-q. The good performance is attributable to better price for logs and plywood as well as higher production volume. In line with the jump in its net profit, Lingui's EPS has increased to 13.1 sen for QE30/9/2006. Based on this, its full-year EPS could be 52.4 sen. See table below.
Based on this estimated EPS & Lingui's closing price of RM1.19 as at yesterday (November 17), Lingui is now trading at a PE of 2.3 times. That's very cheap. And, because this computed PE is so low, there is ample room to absolve any error that may arise in our calculation of Lingui's full-year EPS.
Chartwise, Lingui has broken above its medium-term downtrend in August at RM0.95. Its current up leg may face strong horizontal resistance at RM1.50 & 1.80.
Chart: Lingui's daily chart from Jan 1, 2003 to Nov 16, 2006
Based on the cheap valuation, good sectoral outlook & nice technical picture, I believe Lingui to be a very good investment.
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